Deutsche Telekom in talks to buy MetroPCS

Deutsche Telekom confirmed Tuesday that it was in talks with MetroPCS to merge the beleaguered wireless carrier with its T-Mobile USA unit.

MetroPCS has been bleeding subscribers. But it has a nice cash cushion. At the end of the second quarter, MetroPCS had $2.3 billion of cash and cash equivalents, and short-term investments. That's nothing to sneeze at.

A merger of the two would give Deutsche Telekom's T-Mobile USA unit a nice boost and add heft in a quickly consolidating industry.

The news sent shares of MetroPCS (PCS) spiking more than 21%, while rival Leap Wireless (LEAP) followed suit, surging more than 13%. But the news wouldn't be as welcome for Sprint (S), since a MetroPCS-T-Mobile tie-up could cut into its market share.

CDMCapital:$S If T-mobile does get $PCS, watch out Sprint be in the line of fire...Sprint needs more scale to compete effectively #biddingwar

gabbs:$PCS nobody knows whats going on, but everybody is buying. And then we wonder why the market acts crazy

That's a good point. It wasn't that long ago that T-Mobile and AT&T (T) were talking merger. Oh, and speaking of crazy, let's not forget Apple (AAPL) and the iPhone. Remember when they were the sole carrier? Now Verizon (VZ), Sprint and Leap have all gotten into the game. But that's not calming the clamoring for a competitive edge.

Catherine Tymkiw is a news editor at CNNMoney where she helps oversee breaking news coverage and futures planning. Previously, she was the investing editor. Prior to joining CNNMoney, she was the online editor at Crain's New York Business and has nearly two decades of reporting and editing experience. She tweets @ctymkiwcnn